Nursing home care in Nassau and Suffolk Counties, is the most expensive in the State of New York. On Long Island, you can expect to privately pay anywhere between $14,000 to $19,000 per month for nursing home care.
Obviously, the average person cannot afford to pay these sums out-of-pocket from standard bank accounts, or even from other investment vehicles, without leaving himself, his spouse, and his family impoverished.. Even if he is forced to sell his home to accommodate those fees, it will not be long before he spends those proceeds down and is still left destitute.
However, this is only the fate of people who do absolutely no planning at any time. Long-term care really is so expensive on Long Island and in much of New York that it behooves people to consider some sort of estate and Medicaid planning as a mandate.
It is absolutely in your best interest to undertake an asset protection plan. Once it’s in place, you will have the peace of mind to forget about it, go on to live the rest of your life assured that you set up a strategy to access the system to meet your long-term care needs, if and when they arise.
How Do You Qualify For Medicaid In New York To Help Pay For Long-Term Care?
Medicaid in New York has both income and resource thresholds that must be met. In New York in 2021, the resource threshold is $15,900 and the income threshold depends on the chosen Medicaid program: Community Medicaid or Chronic Care Medicaid.
As pertains to Community Medicaid, your income up to $884 is exempt along with a $20 disregard ($904.00) plus health insurance premiums. Anything above that is considered an income overage.
Fortunately for us, there was a change in law in 1993 with the Omnibus Reconciliation Act. This created several types of trusts, two of which are the special needs trust and pooled trust.
As aforementioned, if you are applying for Home Care Medicaid, you must have no more than $15,900 in all resources. You may keep up to $904 in income plus enough money to pay for your health insurance premiums. However, if you have any overage, you may deposit it into a “pooled trust.” This is a not-for-profit entity specifically setup and sanctioned by the law to accept the overage income of those who are disabled. A sub account is created, and from that sub account, your bills are paid monthly by the pooled trust administrator.
Essentially, this allows you to accept personal home care assistance without giving up all of your income, since the pooled trust receives the income overage and pays your bills. This allows you to remain at home. Prior to the use of these trusts, the disabled often had to choose between moving in with a family member so that they could spend down their income overage and accept home healthcare assistance or opt not to receive the home healthcare assistance but retain their income to pay their household expenses. That’s no longer the case. These trusts allow the disabled to access the system, get the care they need, and also have their bills paid. That’s the Community Medicaid Program.
As pertains to the Chronic Care Medicaid Program, which covers nursing home care, you may keep a monthly $50 personal needs account at the nursing home to pay for miscellaneous expenses, plus sufficient funds to pay your health insurance premiums, and the balance of your income is paid to the nursing home. Depending on whether you have a pension or Social Security, that could total $3,000, $4,000 or even $5,000 per month; that income would be paid over to the nursing home. However, in light of the cost of nursing home care in this region, that’s a small price to pay.
Assuredly by meeting the resource and income thresholds a disabled individual may render himself Medicaid eligible and access the system.
Can’t I Just Give Away My Assets To Qualify For Medicaid?
If you give away your assets far enough in advance, you may indeed render yourself Medicaid eligible. To avoid the penalty period, you would have to do so before the 5-year look-back period for Chronic Care Medicaid, or the 30-month look back period for Community Medicaid.
But why would you give away your assets if you still need them, and are still using them? If you give away your home, it may become subject to liens. Your recipients would not receive a step-up in basis, which means that they would potentially have a capital gains expense if the home were sold.
In addition, if you have some kind of informal agreement with the recipient when you transfer the asset, there’s no way to guarantee that you’re going to get it back or that the recipient will share the resource with other family members upon your passing. Further, they could be subject to marital claims, judgments, liens, accidents, and anything else that can happen in someone’s life that would jeopardize the safety of your resources. If your assets are no longer owned by you, they become vulnerable to your recipient’s creditor’s claims.
If I Go Into A Nursing Home In New York, Will My Spouse Lose Everything?
No, if you go into a nursing home in New York, your spouse will not lose everything. This may be avoided with long-term care planning.
Here in New York, we have something called the spousal refusal. During planning—whether it is Community Medicaid or Chronic Care Medicaid—your spouse may submit a spousal refusal if his or her resources exceed the Medicaid threshold.
In 2021, the maximum community spouse resource allowance in New York is $130,380, and the minimum amount is $74,820. So, technically speaking, if you have more than $74,820, you would submit a spousal refusal. This is a statement that’s signed by the spouse who is not entering the nursing home that he or she will not contribute his or her income and resources to the applying spouse’s care. In that case, Medicaid may only look to the resources and income of the applying spouse when determining his or her eligibility.
So, spouses do not have to lose everything, or anything at all, when their partners go into nursing homes paid for by Medicaid. In fact, refusing spouses may actually receive resources from the Medicaid applicant spouse by way of transfers. Income such as pensions may not be transferred. That is paid to the nursing home. However, if the refusing spouse’s income is below a certain threshold, he or she may actually receive income from the applying spouse to meet the minimum monthly maintenance needs allowance.
In the case of Community Medicaid, the applicant spouse is allowed to deposit overage income into the pooled trust to pay his household bills, which also benefits the refusing spouse.
It is public policy not to permit a community spouse from becoming a public charge or impoverished if his or her spouse enters a nursing home and applies for Medicaid.